That’s according to new CEO John Chen, who assumed control of the beleaguered smart phone maker after Canadian financier Prem Watsa injected $1 billion into the company in November. The cash infusion came after Watsa’s group Fairfax Financial abandoned a plan to buy BlackBerry outright in a $4.7 billion deal. Former CEO Thorsten Heins, whose highly-touted turnaround plan never materialized, was ousted as part of BlackBerry’s restructuring process.

On Friday morning, BlackBerry issued its first quarterly earnings report under Chen. BlackBerry reported revenue of $1.2 billion, down 56% from the same quarter last year. BlackBerry also announced a five-year strategic partnership with Foxconn, the giant China-based manufacturer of electronic products and components. Foxconn’s sprawling factories are home to hundreds of thousands of workers. Under this new relationship, Waterloo, Ontario-based BlackBerry and Foxconn will develop and build low-cost digital handsets, initially aiming toward markets in Indonesia and other fast-growing areas by March or April of 2014, Chen said.

BlackBerry shares have lost nearly half of their value so far this year, and the company’s stock is down a whopping 90% since February of 2011. Not so long ago, BlackBerry was the fastest growing company in the world. Now, it’s become a case study of what happens when a tech giant fails to innovate in consumer technology. In September, BlackBerry, which recently shed the name Research In Motion, announced that it would cut 4,500 jobs as it prepared to absorb nearly $1 billion in losses related to unsold gadget inventory.

Chen is a respected technology executive who is credited with revitalizing Sybase, a database software company. In 2010, SAP bought Sybase for $5.8 billion, more than six times its value at the start of Chen’s tenure. At BlackBerry, he faces steep challenges, not least of which is defining the market that the company will address moving forward. Will BlackBerry continue to push into the consumer market — despite having been trounced in that arena by the likes of Apple and Samsung — or will it refocus on business clients, its traditional strength, and evolve into an enterprise technology company?

“While we have respect for his prior efforts at turning around Sybase, and see the logic behind his likely repositioning of Blackberry into an enterprise software and services company, the task ahead is daunting,” Colin W. Gillis, a technology analyst at BCG Financial wrote in a note to clients. Last quarter BlackBerry reported a net loss of $965 million.

“We expect that this turnaround effort has approximately six quarters to show progress before Blackberry suffers a fate similar to Palm, which sold for $1.2 billion in 2010,” wrote Gillis, who has a “sell” rating on the stock and reduced his price target from $7 to $6. BlackBerry shares closed at $6.25 on Thursday. As recently as February of 2011, BlackBerry shares were trading at nearly $70 apiece. According to J.D. Power and Associates, BlackBerry is at or near the bottom of the pack in its “Wireless Smartphone Satisfaction Study,” behind Apple, Nokia, Samsung, and HTC.

Gillis said his $6 price target applies to a company valued at approximately $3.2 billion, which includes $1.5 billion in cash, $1.1 billion worth of intellectual property value in BlackBerry’s patent portfolio, and $600 million attributed the company’s services business. “The company risks facing further decline in revenue, and while its cash position provides a level of protection we remain concerned on the forward outlook,” Gillis wrote. “We see the company as a distressed asset and expect its valuation could become volatile to both the upside and the downside.”

BlackBerry used to be the premier mobile device on the market. It was Canada’s most valuable company, with loyal users in corporate and political corridors of power from Wall Street to Capitol Hill to Silicon Valley. As recently as 2009, BlackBerry was named by Fortune as the fastest growing company in the world, with earnings exploding by 84% a year. Since 2009, however, BlackBerry’s stock price has collapsed by a stomach-churning 90% to under $7 at its low point last summer.

BlackBerry’s failures have been well documented. After growing to dominate the corporate market, the company failed to anticipate that consumers — not business customers — would drive the smart phone revolution. BlackBerry was completely blindsided by the emergence of the “app economy,” which drove massive adoption of iPhone and Android-based devices. BlackBerry failed to learn that smartphones would evolve beyond mere communication devices to become full-fledged mobile entertainment hubs.

Chen faces one of the most daunting turnaround challenges in the history of the technology industry. Wall Street is betting against him and consumers are abandoning the company’s products in favor of Apple and Android devices. “BlackBerry is an iconic brand with enormous potential — but it’s going to take time, discipline and tough decisions to reclaim our success,” Chen said when he was appointed interim CEO.